With less than a week to go before the expected May 12 halving event, bitcoin's price is swinging upward. The crypto derivatives market is helping to hedge the uncertainty on which way the bitcoin market will go when miners have less revenue after the halving. 

In early trading at 00:00 UTC, the world’s oldest cryptocurrency was around $8,957 before jumping as high as $9,399 at 13:00 UTC (9 a.m. EDT) on spot exchanges including Coinbase. It was changing hands at a price above its 10-day and 50-day technical indicator moving averages, signaling bullish sentiment Wednesday. At press time bitcoin (BTC) was trading up 3.8% over 24 hours at $9,258.

Big-name bitcoin investor Mike Novogratz of Galaxy Digital has been making the rounds this week, talking about how he views digital scarcity driving bitcoin prices higher after next week’s expected halving event. “Next Tuesday we have the bitcoin halving where the inflation rate gets cut in half,” Novogratz said on CNBC’s Closing Bell program Monday. “You talk about inflation in fiat currencies where the [Federal Reserve] is printing money like a money-printing machine and in the bitcoin space the money supply gets cut."

Read more: Bitcoin Breaches $9.2K as CME Futures Hit 10-Month High

This may be true, but it also means a smaller reward and thus smaller revenue for miners to pay labor, rent and electricity. That’s because they will have fewer bitcoin inflows they can sell for cash. However, in July 2016, the last time bitcoin supply was cut in half, the market was much different. 

Garrick Hileman, an economist and a long-time researcher in the crypto space currently at wallet provider Blockchain.com, says things have changed since the previous halving halving event. For example, CME didn’t start offering bitcoin futures until late 2017.  Ahead of this halving, bitcoin miners can purchase futures contracts, locking in bitcoin prices to pay for their expenditures.

June futures for bitcoin are priced at $9,395 on CME Wednesday, above current spot prices. 

“While in theory a decreasing supply and stock-to-flow models may suggest a surge in price, the reality is a lot more complicated,” Hileman told CoinDesk. “A far larger, broader spot and derivatives market means that miner selling is simply less impactful.”

Read more: Bitcoin Halving 2020 Explained

Open positions on CME futures recently hit a 10-month high. However, the U.S.-based platform takes up only a small fraction of the market. The biggest players in the crypto derivatives market — such as Huobi, Binance BitMEX and OKex — are based in Asia and don’t accept U.S. customers. 

Vishal Shah, derivatives trader and founder of exchange Alpha5, says futures play a bigger role in crypto than most realize. According to Shah, due to March’s sell-off that triggered $700 million in liquidations on BitMEX, the subsequent reduction in open interest could lessen downside risk caused by post-having selling pressures.

Read more: BitMEX Is Making the Bitcoin Network More Expensive for Everyone

The reduced number of leveraged open interest, which still hasn’t returned to February levels, means fewer automatic liquidations on price movements. 

“If there is to be any fallout due to lower rewards, at least the leveraged open interest is not there to ‘domino’ the system lower,” Shah told CoinDesk.  

Digital assets on CoinDesk’s big board are mostly in the green Wednesday. Ether (ETH), the second-largest cryptocurrency by market capitalization, was off less than a percent in 24 hours as of 20:00 UTC (4:00 p.m. EDT). 

Cryptocurrency winners include decred (DCR) climbing 3.4%, nem (XEM) up 2.2% and neo (NEO) higher by 1.8%. Losers include ethereum classic (ETC) in the red 1.6% and iota (IOTA) down 1.4%. All price changes were as of 20:00 UTC (4:00 p.m. EDT) Wednesday.

The price of oil is down 5%; 2020 has been a terrible year for crude, which is down 60% for the year to date.

Gold is trading down 1% and closed the New York trading session at $1,687. 

In the United States, the S&P 500 index of large-cap stocks ended trading down less than 1 percent. U.S. Treasury bonds were mixed as the Treasury Department announced a new 20-year maturity. Yields, which move in the opposite direction as price, were down most on the two-year yield, in the red 6%.

Read more: US Arms of Binance, FTX Push Into Margin Trading, but Likely Not at 100x

In Europe, FTSE Eurotop 100 index of the continent’s largest publicly traded companies closed down less than a percent amid poor data on the economy there, particularly retail numbers. “A host of economic releases are highlighting just how dire the economic picture is,” said Joshua Mahony, senior market analyst at investment platform IG.

In Asia, the Nikkei 225 index in Tokyo was closed for holiday. Hong Kong’s Hang Seng index climbed 1% as tech and oil stocks performed well amid coronavirus lockdown easing in the region.